Top 3 Considerations for Procurement Officers When Moving to the Cloud

Today, organizations are increasingly moving workloads into cloud environments to accelerate their digital transformation. Cloud adoption allows organizations to leverage the processing power, scalability, and flexibility of a large-scale data center without making costly upfront investments in hardware and configuration, reducing CapEx. As a result, we are seeing organizations deploy multiple cloud environments from several cloud service providers to meet business needs while avoiding hidden costs associated with vendor lock-in.

While cloud adoption does boast benefits for productivity and cost reduction, they are only realized in cloud environments that are meticulously managed and maintained. In fact, without regular maintenance, moving workloads to the cloud can actually lose organizations money, as excessive consumption, without governance, causes cloud budgets to be significantly exceeded.

This is where the procurement officer plays a crucial role in the adoption and success of cloud deployments.

The Role of Procurement in Cloud Adoption

While many think of the CIO as the key driver behind cloud adoption, the procurement team plays an essential role in maximizing the benefits introduced by the cloud while minimizing the risk. In this case, risk is a lack of governance over cloud environments that would keep stakeholders from utilizing software deployments fully and retiring them on time, resulting in overspend.

With this is mind, procurement teams are poised to play a larger role in digital strategy and execution going forward, with risk management, spend consolidation, and reduction in total lifecycle ownership costs as key priorities for global procurement leaders to drive business value.

3 Components of a Cloud Procurement Strategy

To be successful in these areas, procurement officers must keep three key considerations in mind throughout the cloud adoption and deployment process. Having these processes, goals, and stakeholders defined from the outset will give procurement officers the structure they need to effectively monitor and manage their cloud environments and the applications run within. These three considerations are:

#1 - What are Your Long-Term Business Goals?

A major component of maximizing ROI for cloud deployments is to ensure that each instance of IaaS, SaaS, or PaaS is driving long-term business goals. To measure this, procurement teams must meet with both C-level and mid-level stakeholders to determine the ultimate goals that digital transformation in the organization seeks to achieve. From there, procurement teams should work to ensure that requests for new cloud enabled solutions will assist in meeting these long-term goals in a measurable way. This will help you to steer clear from cluttering the environment with more tools that must be managed and could lead to overspend and reduced ROI.

#2 - Identify and Collaborate with Key Stakeholders

There are two types of stakeholders that procurement officers and teams will have to collaborate with as new cloud environments are rolled out to ensure optimized spend and continued maintenance throughout the software lifecycle. The first group is those stakeholders that are actively facilitating your organization’s digital transformation. This includes the CIO, CFO, compliance officer, and IT director. As new cloud deployments are rolled out, each of these team members will play a role in continual success:

The CIO will assist in ensuring each deployment is delivering value to business goals

The CFO will assist in determining and maintaining a realistic cloud spend budget by department

The IT director configure and deploy new solutions

The compliance officer will monitor new technology through the lens of industry regulations and licensing agreements

Procurement teams must be in regular contact with each of these players to ensure successful cloud deployments.

The other stakeholders that procurement teams must work with are those in charge of each line of business. This is crucial, because SaaS applications have made it easy for each department in an organization to procure their own tools. If marketing wants a new tool to track social engagements, they can easily purchase and begin running the program circumventing proper procurement protocol. This will lead to challenges later on as procurement teams try to get a handle on where to cut costs or where there may be underutilized licenses in the organization. The applications, known as shadow IT, drastically reduce visibility and can lead to security, compliance, and spend issues. Procurement teams need to work with line of business stakeholders to ensure all employees across departments follow proper procurement protocol.

#3 - Have Access to In-Depth Analytics

Another area of focus for procurement teams as they set off on the path to cloud adoption is to understand which metrics they need in order to track spend, consumption, licensing, and the broader software lifecycle for each cloud instance. Having all of this information centralized and visible allows procurement teams to effectively track entitlements, inventory, and consumption (EIC), as well any necessary maintenance. Procurement teams should deploy Cloud Spend Management tool that give them visibility into the following metrics:

Each cloud and SaaS deployment

Transactional data with visibility into what software you own (Entitlement), what software you have installed (Inventory) and what software you are actively using (Consumption).

Centralized software purchasing and cloud consumption records

Records for solution quotes, orders, and invoices

Budget allotment and actual cost for renewals and maintenance

With all of this information at hand, procurement officers will spend less time sifting through databases and spreadsheets, and will be able to devote more time to the continued optimization of cloud resources and ensuring they have a positive ROI.

PyraCloud offers all of these analytics capabilities and more, to ensure procurement teams have continuous visibility into EIC, thus enabling them to optimize spend.

Final Thoughts

As procurement teams take on a more involved role in digital transformation and digital strategy, it is important to understand key focus areas for success. Building cloud deployment strategies around analytics, long-term business goals, and regular communication with key stakeholders will help ensure procurement teams have the visibility they need for effective cloud management and spend optimization.

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SoftwareONE helps clients govern and manage software estate – be it licensing optimization, procuring effectively, or deploying a cloud-based solution. We work with clients of all sizes, across all geographies to manage your software locally or remotely, in the data center or in a multi-cloud environment.